China Drives Strongest Growth in Global Factory Purchasing Since Mid-2022, While North American Manufacturing Cools in September
- barboraarendasova
- Oct 17
- 2 min read
GEP Global Supply Chain Volatility Index, a leading indicator tracking demand conditions, shortages, transportation costs, inventories, and backlogs based on a monthly, survey of 27,000 businesses, was little changed in September (-0.38 vs. -0.39 in August), indicating that global supply chains are still operating below full capacity.
However, Chinese factories report a strong rise in purchasing, pushing global manufacturing procurement activity up at the fastest rate since mid-2022. This expansion pushed Asia’s supply chains to near-full utilization.
In sharp contrast, North American supply chains lost momentum. Manufacturers cited tariff-related delays and growing concerns about the economic outlook, leading many to hold back purchasing and reduce inventory buffers.
Meanwhile, Europe’s supply chains remained underused, as manufacturers in Germany, France, and Italy reduced both purchasing and stockpiles. The region’s supply chain activity fell to its weakest level since March, extending its protracted industrial downturn.
“This is the new normal for global companies — higher prices, tariff pressure, and slower growth are here to stay,” said John Piatek, vice president, consulting, GEP. “For supply chain leaders who’ve been waiting to see how things settle, this is as stable as it’s going to get. It’s time to start executing their revised strategies.”
SEPTEMBER REGIONAL KEY FINDINGS
ASIA: Factory activity in China picked up in September, with a notable boost in demand driving the strongest rise in input purchasing across Asia for 10 months.
NORTH AMERICA: Manufacturers displayed a reticence to stockpile further in September, after August’s bumper rise due to concerns about the economic outlook, although delivery delays and tariff-related disruptions were reportedly hindrances. .
EUROPE: Factory purchasing lost momentum in September, with Germany, France and Italy all reporting softer procurement trends, driving the region’s respective index to a six-month low. .
U.K.: Although the index rose to -0.57, from -0.90, it is still at a level reflecting significant manufacturing weakness across the country.
Index > 0, supply chain capacity is being stretched. The further above 0, the more stretched supply chains are. Index < 0, supply chain capacity is being underutilized. The further below 0, the more underutilized supply chains are.
SEPTEMBER 2025 DETAILED FINDINGS
DEMAND: September saw a revival in factory purchasing, which made its strongest gains since June 2022. Asia was central to this uplift, particularly China, as the globe’s second-largest economy ramped up buying to facilitate sharper growth in production and sales. Input demand trends were far more constrained in North America and Europe.
INVENTORIES:The frequency at which manufacturers across the globe stockpiled due to price or supply fears continued to decrease in September, indicating factory procurement leaders are becoming less concerned about purchase cost inflation or item availability in the near term.
MATERIAL SHORTAGES: Our global supply shortages tracker showed a decrease in September, indicating robust item availability. Factories will have little, if any, challenges in sourcing vendors for commodities, components and other intermediate products.
LABOR SHORTAGES: Staffing capacity was not a constraint for global manufacturers during September. Reports of backlogs rising due to labor shortages fell further below the long-term average and were the lowest in six months.
TRANSPORTATION: Global transportation costs were in line with historically normal levels during September.
Image source: gep.com
